The Energy Resources of Australia Limited (ASX: ERA) share price is selling off on Friday, down 4.05% to 35.5 cents.
The company is currently undergoing a rehabilitation program for the area surrounding its uranium Ranger Mine in the Northern Territory.
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What's driving the Energy Resources share price?
This morning, Energy Resources announced that the Ranger rehabilitation project will overrun both initial cost and schedule forecasts.
According to the release, the full extent of the overrun is not yet known and the company will update the market in due course.
Production at the Ranger Mine ceased in early 2021 after 40 years of operation.
The company will undergo an extensive cleanup of the area with activities such as managing contaminated materials and reinstating the affected landform.
The company estimates that over 18 gigalitres of process water need to be treated over the next five years and 90 million tonnes of material will need to be moved to create the final landform.
According to Energy Resources' June half-year results, the rehabilitation project is a strategic priority to demonstrate the company's commitment to "long-term sustainable operations in the region, create a sustainable, positive legacy and underpin potential future growth opportunities."
The completion of the rehabilitation project was initially projected by January 2026.
Energy Resources held total cash resources of $725 million at 30 June 2021, comprised of $191 million in cash at bank and $534 million held by the Commonwealth Government as part of its Ranger Rehabilitation Trust Fund.
What's next for Energy Resources?
Energy Resource's near-term focus will be on completing its rehabilitation project.
During this time, the company said that it will attempt to maximise cash flow generation from its remaining inventories of drummed uranium oxide. As well as progress inorganic growth options for evaluation.
The Energy Resources share price is up 9.4% year-to-date.
